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Montroll lectures April 10-12, 2007 University of Rochester

Creating Economic Value from Research Knowledge: The Future of Industrial Physics and Physicists. Charles B. Duke Professor of Physics, University of Rochester VP and Senior Fellow Xerox-retired. Montroll lectures April 10-12, 2007 University of Rochester . The Big Picture.

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Montroll lectures April 10-12, 2007 University of Rochester

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  1. Creating Economic Value from Research Knowledge: The Future of Industrial Physics and Physicists Charles B. Duke Professor of Physics, University of Rochester VP and Senior Fellow Xerox-retired Montroll lectures April 10-12, 2007 University of Rochester

  2. The Big Picture • The Global Economy of the 21st Century • What it is • What it means for the U.S. and for physics • Value Creation: The Value Delivery Process • The Future of Industrial Physics and Physicists

  3. Today’s Talk: Why Should You Care? • Point of View: The pursuit of industrial research is fundamentally different in the 21st century than in the 1970’s – 1990’s because the global communications infrastructure and geopolitical environment have changed. This difference profoundly affects the future of physics and that of every emerging physics Ph.D. • In this presentation I consider how industrial R&D and the role of physicists have changed in the global economy and the effect of these changes on industrial physicists, e.g., as reflected in the results of an APS survey of its industrial physicist members. I also discuss what it takes for you personally to be successful in this highly-competitive and rapidly changing environment.

  4. Agenda • Industrial research in a networked global economy • Implications for physical scientists, physics and The American Physical Society • Industrial physicists: Who they are; how they work • Physics careers in the 21st century

  5. Networked, Global Economy • The Internet renders the world a global village • In this environment, businesses pursue international outsourcing and pricing • Globally available, mobile technical manpower • Abundant technical knowledge • Inexpensive, instantaneous global communications • Accessible venture capital. • Manufactured products become complex systems (airplanes, autos, consumer electronics,…) built from standardized components • Manufacturing industries consolidate around dominant, often modular, designs and a few large suppliers (e.g. PC’s – Dell, HP, IBM which source components from common suppliers, usually in Asia Pacific) • Industry structures change from vertical to horizontal (PCs, consumer electronics, autos, ....)

  6. Implications for Industrial Research • Global • Fast • Collaborative

  7. Global • R&D is built on the global communications/collaboration platform. • Because of this platform, everyone can play (“The World is Flat”) • Asia-Pacific has the largest talent pool and largest markets (billions vs. hundreds of millions), soon will have the most engineers and many of the best scientists. • The situation is qualitatively different from that during the cold war era. National economies rise or fall together.

  8. Fast • Competition is brutal: All industrial R&D is schedule driven • Industries consolidate around modular, dominant designs and architectures. Work on modules can be independent, outsourced. • Interfaces become standardized, enabling rapid module and component upgrades. • Global design via the internet enables 24/7 R&D progress. Note: Physical sciences R&D tends to be relegated to components which are increasingly mass manufactured by a few dominant (often Asian) suppliers.

  9. Collaborative • The new global communications/collaboration platform makes all nations, institutions players. Technical talent becomes globally abundant. • Global R&D teams become the norm for low cost, high speed, and getting close to customers. • Open innovation allows universities to play a larger role in industrial R&D, provide specialized services like continuing education (e.g., for skills upgrading), collaborative creation of intellectual property. • But: Asia Pacific aspires to university leadership in science and engineering. There is no rest for US Academics.

  10. Implications for Physicists • Plentiful technical talent globally holds down the salaries, generation of U.S. talent. • The expertise of physicists is less in demand. Research in industry increasingly concentrates on conceiving and designing new products and/or new value chains, rather than on new phenomena. Other disciplines (especially EE) are increasingly regarded as acceptable sources of skills that used to be unique to physicists. • Being an effective team player is a critical skill for physicists in industry: The primary role of physical scientists in industrial research is that of a subject matter expert solving problems on a cross-functional definition or design team. • The high-value competence is the ability to integrate intellectual property from different sources into products that source components (or even assembly and service) from globally dispersed suppliers.

  11. Total Value of a Physics Education • Education is valued to individuals as a a sequence of nested options: Doing well at one level gives the option to proceed to the next. • Key point: Investment in education is a proven value creator for society but is risky for individuals. This is why governments sponsor education. • The option to abandon is alive and well: E.g., Ph.D theoretical physicists going into finance or biological modeling. • The global economy has increased the market risk of the value of any specific education, hence generally increased the value of pursing education as long as possible, making course corrections along the way. • Rapid technical change has reduced the longevity of skills learned in college or graduate school, thereby reducing the discounted cash value of the (initial) jobs gained on the basis of formal education. • Global technical talent competition, movement of research operations abroad, and declining importance of physics as a key component of systems value creation all reduce the option value of graduate education in physics for employment as a professional physicist, per se.

  12. Implications for Physics • In a global economy, increasing support of physics R&D and education is motivated primarily by economic impact. • Industrial physicists are the primary agents who generate this economic impact. • Stable or declining government funding for basic research in physics requires that new physics Ph.Ds primarily work for industry, not academia or government. • The global economy has changed profoundly the nature of physicists’ jobs in industry. • Create products not new knowledge • Perform mostly engineering tasks, not fundamental research • Work under intense time, performance pressure; little time for “extracurricular” activities • These changes have made the “new” industrial physicists much less interested in active participation in scientific societies, including the American Physical Society (APS).

  13. Implications for the APS • Industrial research in the physical sciences has changed from knowledge creation to option creation -- with implications for APS meetings and publications. • Industrial research has become dispersed: Many small players are replacing a few dominant players– with implications on the delivery of physics content to industry and physicists’ careers in industry. • APS and other professional societies have lost a large cadre of industrial physicists who used to perform basic research at large firms. • The nature of most industrial physicists in APS has changed: They solve problems rather than create new knowledge. • If the APS wants to maintain its service to the entire physics community and preserve its (rapidly declining) industrial membership, it must expand its horizons to serve the new kinds of industrial physicists who are emerging.

  14. Who are Industrial Physicists? Physicists at large firms • Used to perform basic research much like academic physicists • Increasingly perform engineering functions on cross functional teams • Have institutional access to the technical literature • Declining in number, rapidly Physicists at small firms, consultants • Perform applied research, development • Similar to engineers rather than academic physicists • Solve problems or create products , not knowledge • Do not usually have institutional access to the technical literature • Increasing in number Reference: C. B. Duke et al., Report of the APS Task Force for Industrial Physicists (American Physical Society, College Park, MD 2006); http://www.aps.org/publications/apsnews/200611/industry.cfm

  15. Survey of Industrial Physicists in APS • Use physics on the job • Collect information via email and the web • Rarely publish in APS journals or attend APS meetings • Use APS journals once a year or less • Need physics information beyond APS journals • Usually belong to other professional societies besides APS • Connected to APS primarily via Physics Today and APS News Reference: Chu, R. Y. and Guo, S., 2006 APS Industrial Membership Survey: Preliminary Report (American Physical Society, College Park MD, 2006).

  16. Physics Careers in the 21st Century • The academic/teaching career track persists but becomes more selective and funding becomes more bureaucratic. • An industrial/business career track becomes the norm. • A wide range of activities is accessible: solve problems in physics, engineering, finance, biotech,….. • Career paths become much more complex: Diverse jobs with multiple employers are likely. • Pensions are history: Retirement planning begins with your first job. • Individual contributor careers become insecure: Individuals have severe problems changing jobs after 50 • One success path is to become an entrepreneur: Start your own business. • To remain an individual contributor become a consultant. • Industrial physics individual contributor careers become like today’s industrial engineering careers, look to them for models.

  17. Can You Compete? • U.S. physicists now compete with the best of China, India and the Former Soviet Union as well as Europe and Latin America. These nations combined have many times more “gifted” students than the U. S. has students. • Are you hungry? How does your ambition and work ethic compare? • Are you connected? Can you readily acquire new information outside your specialty from your network? • Do you share and collaborate? A diverse group almost always outperforms even an exceptional individual. • What is your unique value proposition? Are you special (Warren Buffet), specialized (brain surgeon), anchored (local plumber) or adaptable (successful industrial physicist)?

  18. Tips for Success in Industrial R&D • Most assignments are on cross functional teams: Commit and deliver. • Progress is scheduled: Get results fast, reliably. • Be generous: Get and give help; say thanks and share credit. • Assignments are task oriented: Continuing education is a necessity; being connected and quick learning are rewarded. • Career planning is essential: Where will you be when you are 55? • A total career as an individual contributor becomes rare • How will your career evolve? From individual contributor to what? When? • How will your finances evolve? What is your financial plan for the latter stages of your career? retirement?

  19. Synopsis • Firms are utilizing the new global communication/collaboration platform to do R&D globally, at lower cost, higher productivity and speed. • Industrial research is forever changed: it is focused on business performance, globally dispersed, and expanding where the talent is —increasingly in Asia-Pacific. • U.S. firms, scientists and technologists now compete frontally with the best in the world. Physics and U.S. physicists have lost their center-stage standing of the Cold War era. Fortunes and careers will be different in the 21st century. • Because of budget constraints, globally available technical manpower and the trend from devices to systems, the support for basic research in physics in the U.S. has been stagnant. One consequence is that most new physics Ph.Ds must find employment in industry. • Industrial R&D careers become fragmented, and retirement benefits are disappearing. Career and financial planning become essential. • Today’s industrial physicists solve problems and create products. They do not create knowledge like their academic brethren. They do not have job security. They have different values and work in different environments. Be prepared.

  20. Back to the Top • The rise of a global economy based on a global internet communication infrastructure has transformed fundamentally both the nature of industrial R&D and the careers of industrial physicists. • Economic value is created via structured product or service design and delivery processes that link R&D with customers, are global in scope, and are focused on rapid delivery. • The future for industrial physics is that it occupies an ever smaller part of the total value chain and becomes global in scope. • The future for industrial physicists is that competition for individual contributor jobs intensifies while the security and remuneration of these jobs stagnates or declines. • The basic consequence for individual industrial physicists is that responsibility for your career has devolved from your employer(s) to yourself. Be prepared to increase the value that you deliver throughout your career and to plan carefully for your financial future.

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